There are very logical steps you can take to increase the value of your business upon exit. Last week we discussed five of them. Here are five more.
Here are five factors that can dramatically increase the value of your business at exit.
5 Keys to Increase Your Exit Price
1. Provide a formal business plan.
This may seem like a given, but many firms don’t maintain and utilize formal business plans. By providing the plan and then demonstrating how you use it on an ongoing basis, the buyer can see forward momentum.
2. Maintain a strong sales force.
You will add value to your business if you can prove that someone besides you can attract new customers. If you are the key salesperson, you should have at least one other in place to totally step out of the business upon exit.
3. Present a diversified list of loyal clients.
A key to driving up the sales price of your business is having a long list of loyal clients, none of whom represent more than 20% of your revenue.
4. Limit owner perks.
If you currently have superfluous perks embedded in your financials such as multiple personal vehicles, children on the payroll or club memberships, remove them ASAP. Items like these tend to muddy up the process and can be the difference between closing the deal or not.
5. Provide a good location and layout.
Your location can serve as either a positive or a negative in a sale. Convenience for employees and customers, as well as relation to suppliers can add value to the sale price of your business. In addition, the way you’ve set up the layout of your business should flow logically.